CGT cap election
Capital gains tax cap election – instructions and form
This form is for superannuation funds and their members to make a capital gains tax (CGT) cap election (NAT 71161).
You should complete this form if you make a personal super contribution using the capital proceeds of the sale of certain small business assets, and you elect to exclude them from your non-concessional contributions cap.
You are only eligible to do this when one of the following capital gains tax (CGT) concessions applies to you:
- the small business 15 year exemption –a total exemption for a capital gain on a CGT asset if you have continuously owned the asset for at least 15 years
- the small business retirement exemption –an exemption for capital gains up to a lifetime limit of $500,000 (reduced by any previous CGT exempt amounts you have had disregarded under the retirement exemption).
There are also basic conditions you must satisfy before either of the small business CGT concessions can apply, such as the $6 million net asset threshold and the active asset test.
The basic conditions and the other eligibility rules for the small business CGT concessions are complex.
You must check you are eligible before making this election and signing the declaration in section E. You may need to seek professional advice.
Download the Super fund members Capital gains tax cap election form (NAT 71161, PDF 285 kB).
When to complete the election
This election must be made and given to your super fund before or at the time you make the contribution it applies to.
An election made after the contribution it refers to is not valid. Your contribution will not be excluded from the non-concessional contributions cap. Your super fund will not be permitted to report to the ATO that a valid election was made.
Effect of making the election
The purpose of the election is to exclude personal contributions from your non-concessional contributions cap. It has no other effect on your super. For example, it does not stop you receiving a super co-contribution for the personal contribution if you are otherwise eligible.
When you give the election to your super fund they check if it’s valid and, if so, record the contributions it applies to. When they report to the ATO all the contributions made for you during a financial year, they report contributions this election applies to separately from other personal contributions.
Completing the election form
Section A: Your fund's details
Provide the name of your super fund and your member account number so your super fund can identify your account.
Section B: Your details
Provide your personal details so your super fund can identify you.
Section C: Payer details
If you are making the contribution yourself, include your details. If another entity is making the contributions for you under your instructions, provide that entity’s details.
This election is only valid for personal 'after-tax' contributions. If a payer is not acting for you and on your behalf, the contribution may not be a personal contribution. For example, if your employer makes the contribution under an obligation to contribute for you, it may be treated as an employer contribution and be counted towards the concessional contributions cap.
Section D: Election
Place an ‘X’ in the appropriate box to indicate the CGT concession you are eligible for and the type of election you are making. You can make both elections on this form for different parts of your contribution. In each case, provide the amount of the contribution you are electing to exclude from the non-concessional contributions cap.
There are limits to the amounts you can elect to exclude in each case. You must not elect to exclude either:
- an amount of more than $500,000 under the small business retirement exemption
- a total amount, at both the 15 year asset exemption and the small business retirement exemption, that exceeds your lifetime CGT cap (for 2016/17 the indexed cap is $1,415,000. This may be indexed each year).
Your election will not be effective if you exceed these limits. Your contributions, or the part of them that exceeds the limits, will be counted towards your non-concessional contributions cap.
- You should also complete this election if you make a personal contribution of a financial benefit you receive from a 'look-through earnout right' that has arisen from a CGT event to which either of the small business concessions above, applies. To qualify, any financial benefit provided under the right must generally be made no later than 5 years after the end of the income year in which the CGT event happens.
You must indicate on this form whether your election is for a contribution of a financial benefit from a 'look-through earnout right'. For further information refer to Changes-to-CGT-treatment-for-certain-earnout-rights.
Your superannuation fund will be able to accept a contribution of a financial benefit from a 'look through earnout right' in relation to the disposal of an asset to which either the small business retirement exemption or 15 year asset exemption applies if the fund would not have been prevented from accepting the amount as a contribution if it had been made in the financial year in which the CGT event happened. In addition the contribution can only be accepted to the extent it does not exceed your CGT cap amount.
Section E: Declaration
Read the declaration carefully. If it is correct, print your full name, sign and date the declaration. The date is important and must be the actual date you sign the election. If you make a false declaration you may be penalised.
Give your signed and dated election to your fund with your contribution or before your contribution is made. If you lodge it late after making your contribution, it won’t be valid and your super fund will have to reject it.
The information on this election is for you and your super fund. Do not send this election to us. We don't collect this information; we simply provide a format for you to provide the information to your super fund. Your super fund reports your election to us when it reports all your contributions each year.
Send this election to your super fund either before or when the contribution is made.
Instructions and form for the capital gains tax (CGT) cap election.Last modified: 14 Nov 2016QC 19584